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I hear you, but frankly I would regard it as a token purchase.
No one getting excited - but if I were underwater with my 1.1 million shares and thought it was continuing down - I would not add to my woes
Let's not get too excited by the director purchase - 15K shares isn't very significant, especially when set against her existing holding of 1.1m shares.
AP-Invest - Yes been watching since 130
I think maybe this is about to turn as we will get interims soon and news about how they might ' leverage cash ' as they said in RNS
I probably bought in slightly higher than you guys, at 77p, but much like yourselves been keeping an eye on it as the 40% drop seemed overdone in my eyes, yes they are reliant on a very few customers, but in my eyes a small blip on the road to increased profitability, the director buy yesterday only increased my confidence
GLA
Decided to come in today after director buy , have been waiting for a trigger point and quite interested in how they use the cash pile as they have suggested acquisition.
This appears to be, from where I am sat at least, very under-loved and overly sold. MCAP currently standing at £10M net cash at £5M. Recent loss of contract in RNS expected to hit -£300k in revenue, which is around 10% of gross revenue, but not sure how that warrants a 40% drop in the share price, compounded against the yearly drop it has already suffered given some of the high profile clients it has on its book. I can likely see dividends possibly being scrapped, and in a way I’d rather them do that, pay down some debt and better stabilise the foundations of the company whilst riding through the pandemic. However, I am not sure if that is likely to happen given such a high percentage of individual investors in the company.
A very difficult company to analyse, but one of the better ones within the Microcap segment. I note that it was rated a recovery buy from ST at IC on 06/09/21 when the price was 135p - a further 44% decline to the share price on -£300,000 revenue doesn’t add up in my eyes.
I would welcome other peoples views here as this is an incredibly niche industry and market to both value and penetrate…
Bought back in today with a small purchase of £1k. Looks like a seller is still around as I can buy way more than I can sell.
Saying that, this is getting extremely cheap with an Enterprise Value of just £5m. Currently has a PE of 12 but if you work it out via EV/EBITDA then it drops down to a low 4. Broker finncap has a target price at 180p. There is support at this level, but with probably Boros selling out it could continue to drop a little more. Boros held 2.47% last count, so no more notifications will be made for him selling. How much is left to sell, who knows. Nav Price per shares is 49p.
Sadly yes. No sign yet of any reversal as all its doing is slowing dropping. I’m going to research this again now as I believe it could be close to the bottom. 75p looks possible now with as low as 60p could be on the cards. This is still a good company despite the loss of 2 contracts and a possible takeover target. But while it is only hitting new lows I’m looking to buy back in at 75p and add on drops below that. I may do a small purchase today also as you never know when it may turn around.
Well, you were spot on with yr prediction 42trader, wish I'd listened to you! Let's see if this support level holds.
The risks of investing in tiny microcaps - share price now half what it was at the start of the year... and all that cash sitting on the balance sheet!
B*gger it, I topped up at 96.4p. This has fallen far too far and I'm quite prepared to be patient.
... or a move down. Looks to be moving further down to 85p where the next level of support is.
This is looking good for a move to 140p in the next couple of days.
The growth prospects for this company appear to be very weak. Still looks overvalued. Looks to me that the SP will continue to go lower, until the growth prospects are proven wrong...
but of course it can get cheaper still... ha!
Seems today's weakness caused by LTH Leon Boros presumably losing patience and reducing his stake by about a third, per today's RNS.
Just have to sit this one out and hope for better times.
My memory is that the dividend is to be paid today. Do you fellas have any insight on how this is done--deposit direct to the investing account or mailed cheque?
Many thanks in hope.
Feels hard adding to equities atm, but I've topped up on today's price weakness.
Arcontech's defensive qualities are what my portfolio needs in these volatile times... and it's going cheap!
Thanks for sharing. He has been bullish for a while. I think the main problem with his argument against what he is saying (which is the share is undervalued) is that the earnings multiple is (usually) related to growth (rather than the fact it is an operationally leveraged software business with a strong balance sheet), and the business does not appear to be growing fast enough. I am continuing to watch from the sidelines, because I like the company, especially financials, but I find myself in a position of "having to take their word" for the reasons for slower sales growth (e.g. longer sales cycles, ST's other reasonings) rather than being able to deduce for myself. I do agree with him that the valuation is an attractive buy in price presently.
Reading this and the RNS, again, I’m seeing nothing that makes me want to sell the stock. My little holding is in my mental old oak chest for the long haul.
Many thanks indeed for this.
Arcontech unloved and materially under-rated
Flat revenue of £3m and pre-tax profit of £1.02m in 12 months to 30 June 2021.
Net cash up 8 per cent to £5.4m (40.6p a share).
Dividend raised 10 per cent to 2.75p a share.
High level of pent up demand with qualified list of prospective new customers across six countries.
Aim-traded financial software provider Arcontech (ARC:135p) delivered a resilient performance in its latest financial year despite the Covid-19 pandemic restricting customer contact due to remote working practices.
The company makes its money by providing software products and bespoke solutions for the collection, processing, distribution and presentation of time-sensitive financial markets data. Sales cycles are long and complex, which discourages clients from switching to another provider, so face-to-face meetings with key decision makers are key when pitching for a new contract. For instance, Arcontech needs to demonstrate: the potential cost savings of its solutions; how it can replicate the functionality of the clients’ existing products; and how it can deliver new benefits to minimise disruption. New contract awards are small initially and then scale up, so generating organic growth in future years.
Arcontech did manage to win new contracts in the 12-month trading period, one with a Tier One bank client, to add to its roll call of blue-chip clients which includes Barclays, JPMorgan, Morgan Stanley, and Bank of England. The small sales team has also been successful in strengthening the qualified pipeline of potential prospects, but Covid-19 restrictions have made converting the robust pipeline of opportunities difficult in the near-term, hence why the directors expect current year profits to be flat (or lower) as any pick up in revenue will not be fully reflected until the 2022/23 financial year.
The market reaction has been savage with Arcontech’s share price plunging below the 160p level at which I suggested buying at six months ago (‘Tap into a prodigious cash generator’, 28 February 2021). It’s a ridiculous overreaction. At the current price, the company has an enterprise valuation of £12.6m, or 12 times net profit, a low-ball valuation for a high margin (operating margin of 36 per cent), cash generative (free cash flow of £0.8m forecast in 2021/22) business that has strong defensive characteristics (recurring licence fees account for 93 per cent of annual revenue). Arcontech is also highly operationally geared given its relatively fixed cost base. Indeed, the incremental operating margin on new sales is around 60 per cent, so any contract wins have an accentuated impact on profits. Moreover, at the current valuation Arcontech is an obvious takeover target in a consolidating industry with peers trading on PE ratios of between 32 and 43 times. Recovery buy.
Any of you fellas have access to ST’s latest piece?
Looking through the note, the results don't look bad to me. Sure they've had some opportunities deferred, but revenue slightly increased, the sales pipeline increased, the product suite increased, the cash position increased (and the div secure), etc. Given the decline in price, (~175p to 134p) it looks like its on sale. In any case, as a result, today I've been buying.
no jam today, tomorrow or the next day....